What do I do!? – I wasn’t at fault and their insurer won’t pay a full replacement value

4WDers are a pretty friendly bunch, always ready for a yarn about the latest gear, where they’ve been and where they want to go. We love going to events for this reason – to spend …

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Club 4X4 Insurance
Aug 30 2017
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4WDers are a pretty friendly bunch, always ready for a yarn about the latest gear, where they’ve been and where they want to go. We love going to events for this reason – to spend time talking to customers and enthusiasts in general. Sometimes, you come across a story that really opens your eyes.

We met Tom (not his real name) at the National 4X4 Outdoors, Fishing and Boating Expo in Melbourne a few weeks back (see Jackson’s highlights here). Tom’s story is all too common in 4WD circles. Following being rear-ended in a traffic incident, he was horrified at what he was offered for the now mangled wreck that was his 2014 Hilux SR5.

In his own words, Tom exchanged details with the at-fault party and waited to get a call from their insurer to go through the claim process. In the meantime, he compiled a full list of the accessories and modifications that he had lovingly added so that he could tell the other insurance company how much he had invested – this totalled close to $40,000. When you add this onto the value of an SR5 of that vintage you are looking at a total replacement value of up to $85,000. With this in mind, you can imagine Tom’s utter astonishment to hear that the third party’s insurer was offering a mere $35,000 based on their market value assessment.

He battled it, but unfortunately as the weeks passed Tom realised his arguments were futile and that the other insurer did not have to pay him more than the “market value”. What’s more, if he accepted the offer he couldn’t even buy the vehicle back to salvage some of the accessories! Tom then turned to his insurer and advised them what had happened – their response was no different as their valuation came from the very same data source. They went on further to explain that even though they had most of his accessories and modifications listed on his policy, it did not affect the total sum insured in the event of a total-loss. Devastating news for Tom, but far too common amongst 4WD enthusiast’s. The process is still ongoing for Tom and he is currently in negotiations with both companies, but the early signs indicate that he could be up to $50,000 out of pocket.

Now, I am sure you hear us bang on about our differences on a weekly basis so let’s give some context first and talk about how we value your vehicle. After we determine an agreed or market value for your vehicle (your choice), we then ask you what the value of your non-standard accessories modifications amount to. This value gets added to the vehicle value to form a total sum insured. So in Tom’s case, he could have had an agreed value for the full $85,000 with Club 4X4. With no intention to rub salt into his wounds, I did mention this to him to make sure that he understood the importance of having accessories and modifications covered for their replacement value in black and white, on your certificate of insurance. Unfortunately he has learnt the hard way, but the message needs to spread that there are better options available!

The benefit of having your modifications and accessories covered for an agreed value with Club 4X4 is that in a scenario such as this, you are not at the mercy of another person’s insurer. You won’t need to hear the standard line “I understand that you have spent $80,000 on your fourby, but unfortunately my computer says it is only worth $50,000.” If you were insured by Club 4X4 in this situation, you pay your excess to us directly, get your agreed value paid out and we will take on the task of recovering what we can from the other insurer. In addition to this, we also give you the first rights to salvage the vehicle after it has been written off regardless of its age, so you can hold onto some of those irreplaceable items you spent years acquiring.

The old saying is that bad news spreads quicker than good. The reality is this is the kind of bad news that could cause years of heartache… and all you had to do was get a quote with Club 4X4!

Until next week,

Happy Touring!

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Club 4X4 Insurance